Also it was observed that in India nothing substantial has been done as far as this issue is concerned. This was one of the main reasons why this research was undertaken.
In the second stage of the study, response of some 350 consumers was taken with the help of a structured questionnaire. The respondents were randomly selected from the ‘exit’ point of the retail outlets in the city of Lucknow. They were asked to rank the eleven categories of sales promotion schemes on the basis of their attractiveness with respect to FMCG products. These consumers were also asked to comment on at least two most attractive and two least attractive sales promotion offers they had ranked. They were probed to highlight the attributes of those offers and were recorded verbatim.
From the analysis of the second stage, two significant findings emerged. First, the two most preferred and attractive sales promotion offers out of a total of eleven categories broadly available in the market with the FMCG product categories. Second, the attributes because of which the offers are considered as more attractive than rest of the offers.
Once these findings could be generated from the second stage of the research, these were then used in the third stage of the research. In this stage the researcher on the basis of the experience and findings of the second stage of the research, derived four categories of sales promotion offers that were found to be most attractive by consumers. Here it is important to note that these four categories of offers were formulated by visualizing the features, which were present in the top two offer categories. That is, these four were derivations of the top two offers.
Similarly, the attributes, which were most preferred, were selected and these were then translated into the four categories of mode of accessibility of the gift offered in the promotion. It was concluded from stage one that the most important attribute for the consumers in an offer is the method by which the gift attached to the offer is available to the consumer. Therefore, four most probable ways to access the gift along with the offer were derived. A group discussion session was also conducted before arriving at final four modes of accessibility.
These four derived offers and the four derived modes, along with the four most commonly used brands used by the consumers and the four different pricing of 150gm pack of toothpaste was used to run conjoint analysis in the second stage. Conjoint analysis was used to obtain individual weights on the willingness to purchase toothpaste with given sales promotion offers and mode of accessibility of the gift attached with the offer and in the available price range.
This phase consists of conducting pilot study with consumers, applying conjoint analysis technique (keeping in view the multi-attribute nature of sales promotion schemes), designing orthogonal plan cards, determining the sample size; and lastly collecting the data.
The last phase of the study deals with analyzing the data through conjoint analysis subroutine of SPSS package, and then using ANOVA to draw inferences.
At last, the Strategic implications of survey findings are discussed. The offer/scheme while formulating any consumer sales promotion is of utmost importance. Next to it in importance is the Mode of accessibility of the gift in the offer, which is almost equal to offer as far as score/weights generated by SPSS is concerned. The price of the toothpaste comes next in importance and the least important is the Brand. Thus, we can conclude that it is not the sales promotion offer, which attracts the consumers; rather it is the WAY / METHOD in which the offer is “Communicated and Implemented” by the company.
Method
Stimuli Construction:
The four important attributes identified for the toothpaste are:
- Brand – this is the name of the company of the toothpaste.
- Offer – the sales promotion offer for consumers.
- Mode – the means to receive the gift from the offer.
- Price – the price of 150 gm of toothpaste.
The levels of the above-mentioned attributes are as follows:
- Brand – Colgate, Close-up, Pepsodent, babool
- Offer – 50 gm extra in this, 1 toothpaste (50 gm)
- Mode – Immediately with purchase, on the next purchase, Co. sends on receiving Flaps, door delivery within a weak.
- Price – Rs 36, Rs. 38, Rs 40, Rs. 42
Input Data Design:
The next step after constructing the stimuli is to design the PROFILES to collects from the respondent. In this research work, the profiles are designed by using statistical software package SPSS (11.5 Ver.). A total of 32 profile or combinations were generated by the SPSS. The ranking for all 32 combinations of attribute levels are then collected from the respondents. The 32 profiles or combinations can be seen from the table below.
Table- Profiles or Combinations
Sample size:
No. of Respondents = 200
Using Simple Random sampling method
Results of Conjoint Analysis:
The 32 profiles generated by the computer software (SPSS package) were administered to around 200 respondents for their opinion. The respondents were asked to rank all the 32 profiles or combination of attributes in the order of preference. These ‘Ranks’ were again entered in the computer and run for the final analysis. Summary of results of Conjoint Analysis can be seen from the table.
In the first attribute Brand, maximum utility was observed in the Pepsodent Brand with utility of 0.6243. The second position in the brand goes to the Close-up with utility of 0.3626, and the least utility was observed in the brand Colgate with a utility score of -0.5661, that is a negative utility score. The probable reason for this could be the influence of advertisements on television and gifts for small children. The reason for Colgate ranked, as the least brand in utility could also be the psyche of the consumer, wherein the respondents generally do not answer the most heard or common names/brands, even if they use it.
In the second attribute Offer, maximum utility was observed in the offer of “33% Discount on this pack” with utility of 1.4949. The second position in the offer goes to the ‘Cut Flap and get Rs. 13’ with utility of -0.3757, and the least utility was observed in the offer ‘Free 1 Tooth Paste (50gm)’ with a utility score of -0.7246, that is a negative utility score. The probable reason for this could be the perception of the consumers to accept any offer above 25% to be adding value substantially, consumer perceive the 33% discount to be equal to saving of almost 40-50 percent. It is interesting to note that consumers even perceive it as a bigger discount that getting a separate pack of the same product (toothpaste).
In the third attribute Mode, it refers to the mode of accessibility of the offer by the consumers, maximum utility was observed in the “Immediately with Purchase” mode with utility of 1.4687. The second position in the mode goes to the ‘Door delivery within a week’ with utility of -0.2711, and the least utility was observed in the mode ‘Co. sends on receiving Flap’ with a utility score of -0.7362, that is a negative utility score. The probable reason for this is obvious that consumers prefer immediate delivery of gift with the purchase, and they do not trust on the companies promising them to send the gift later.
In the fourth attribute Price, maximum utility was observed in the Rs. 42 price with utility of 0.4150. The second position in the price goes to Rs. 38 with utility of -0.0792, and the least utility was observed in the price Rs. 40 with a utility score of -0.2478, that is a negative utility score. The probable reason for this could be the psyche of the consumers to take premium priced product for the personal care category like toothpaste. They believe that the quality of such products is always better than the rest. It is also interesting to observe that the second highest cost is ranked as the least in utility score, the reason for such results is interesting to find out, here it can be only said that the probable reason for such a response is that any product next to premium is opined as equivalent to all others present in the market.
Finally, there are overall “Importance” score generated by the computer package, which gives the importance attached to the attributes itself by the consumers. For example, in this study there are four attributes – Brand, Offer, Mode, and Price. Attribute OFFER with importance score of 35.36 is adjudged as the most important attribute while purchasing this category of product, toothpaste. The attribute second to offer is the MODE with importance score of 35.12. The least preferred or important attribute according to this study is PRICE with the least importance score of 10.56.
Thus, we can conclude that it is not the sales promotion offer, which attracts the consumers; rather it is the WAY / METHOD in which the offer is “Communicated and Implemented” by the company. The study also gives some directions for further research. This study should have been conducted on much wider scale, but due to the financial and time constraint, the survey has been confined to toothpaste only, that too only in the Lucknow city. To be able to arrive at more generalized findings, the study should cover other product categories (e.g., Tea, Soap, Cosmetics, etc.) including consumer surveys in few other cities as well.
Table: Summary of Results of Conjoint Analysis
16.5007 CONSTANT
Pearson's R = .688 Significance = .0000
Kendall's tau = .418 Significance = .0004
This model can be considered as statistically significant (Significance = .0000) at a confidence level of almost 100%.
GRAPHS:
Brand Utility Graph
Offer Utility Graph
Mode Utility Graph
Price Utility Graph
Overall Importance Graph
